Microsoft Innovation Center Report 2008-2009 vol.2
SaaS as Business Potential and Microsoft's Effort: wipse IT Venture Community SaaS Seminar
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June 20, 2008, Sumitomo Skyhall
wipse 
(Windows + Services Consortium), aiming at the proliferation and promotion of the new generation of user experience where Windows platforms and services integrate, held “IT Venture Community SaaS Seminar,” and it confirmed Microsoft’s efforts for SaaS and its business potential.
Not only interested participants from the public, but also selected partners and semi-selected partners of Microsoft Incubation Program and Microsoft IT Venture Support Program participated in this wipse IT Venture Community. In addition to the reports from Microsoft Evangelists and Consultants regarding the market trends and the latest technologies, two partner companies that have already rolled out their services as SaaS introduced their case studies and valuable experiences.
On This Page
 | Microsoft as a Hub Between Partners and Customers |
| Points to Get into SaaS Business |
| Experiences of Companies in SaaS Business |
| Engineers Counting on SaaS Exchanged Opinions |
Microsoft as a Hub Between Partners and Customers
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Microsoft's activities are based on a strategy called Software plus Services. Including SaaS (Software as a Service) as a part of it, this strategy aims at achieving new experiences where people, devices and services are integrated by combining new technologies such as SOA (Service Oriented Architecture), Web 2.0, RIA (Rich Internet Applications) and various devices. Kazunori Hirano (Architect Evangelist, Developer & Platform Evangelism, Microsoft Co. Ltd., Japan) explained Software plus Services, quoting Ray Ozzie, Chief Software Architect, Chief Software Architect Office, Microsoft Corporation.
“it's simply that we need to think of the Web as a hub, the hub of our social experiences, our social mesh, the hub of our technology experiences, our device mesh” - Ray Ozzie, Chief Software Architect, Chief Software Architect Office, Microsoft Corporation
By mesh, Ozzie refers to the state in which people, devices and services are interconnected in a web-like fashion. In order to establish such a cloud computing, Ozzie suggests three principles: The first principle is to use the Web as a hub for the device mesh and the social mesh. The second principle suggests migration of enterprises (corporate information systems) to the Internet cloud. And the third principle aims at, by breaking software into smaller components, allowing developers to collaborate with each other as they wish.
“Microsoft provides not only the packaged services including Windows Live,” Hirano continued, “but also supplementary services which the partners can provide with their unique values added, and the building block services that, combined with the partners applications, generate new values. Please wait until PDC (Professional Developers Conference) this fall at which time the details will be announced.”
Some hosted supplementary services, including Exchange Hosted Services, are now provided in Japan. For the building block service, Virtual Earth and Silverlight Streaming are already in use. In addition, other research environments including Live Mesh, SQL Server Data Services, and BizTalk Services are ready. Hirano emphasized that, in the cloud computing environment where users in various environments are connected via various devices, user experience is important. He proposed the full use of the next generation of user experience by WPD (Windows Presentation Foundation) and Silverlight.
“In the cloud computing environment,” said Hirano, “Microsoft should serve as the Internet hub. Microsoft will provide a variety of services and technologies so that you can all use them to connect to the people and services provided by the partners (customers).”
Points to Get into SaaS Business
Besides the fact that Microsoft commits to the Software plus Services strategy, SaaS has attracted attention in the overall software market.
“According to IDC research1,” Isao Otake (Principal Consultant, Microsoft Consulting Services, Microsoft Co. Ltd., Japan) commented, “the sale of software on demand in 2010 is now revised upward by about 2.5 times. As this research result suggests, it can be concluded that they anticipate the expansion of the SaaS market, probably because the technologies that support SaaS are now widely in use.”
In Japan, relevant ministries have promoted SaaS, and the market is demanding a shift to SaaS. Due to the enhancement of internal control and compliance, demands for SaaS that is capable of enhancing security, including centralized management of information assets, operation management by specialists, and operation automation, has been increasing. With such a background, Isao Otake (Principal Consultant, Microsoft Consulting Services, Microsoft Co. Ltd., Japan) explained some points to get into SaaS business, illustrating what services are in focus.
“It is foreseen,” Otake analyzed, “that proliferation of SaaS will start from collaborations such as groupware and SNS, and it will then expand to other service areas including front-end CRM where rapid changes in business are seen. On the other hand, it appears that a number of companies are rather reluctant to employ SaaS in the fields that manage complicated business processes, including compensation, production management and logistics. I would say the values currently expected from SaaS are reduced TCO, rapid deployment and easy deployment.”
Otake explained that transformation in technology development, marketing and even organizational structure is required in order to move into SaaS business where the needs and purchase behavior differ from those in the package distribution business. He suggested the use of Microsoft SaaS Incubation Center Program, offered from this spring, as an entry point for the partners to move into SaaS business by addressing commercial, financial and technical issues.
1 Worldwide Software on Demand 2007–2011 Forecast: A Preliminary Look at Delivery Model Performance, by IDC
Experiences of Companies in SaaS Business
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This seminar had guest lecturers from some companies that are already in SaaS business. Yuji Onuki from KDDI Corporation, which has established a comprehensive alliance for SaaS-based business with Microsoft, introduced an enterprise-oriented SaaS-based solution service, Business Port.
"The key point of Business Port," Yuji Onuki (General Manager, Application Marketing Department, Solution Strategy Division, KDDI Corporation) explained, “is that it aims to provide new services to customers by combining the partners' applications via Microsoft technologies on the network service KDDI provides. With KDDI Business Outlook, for example, the customer can use Exchange Hosted Services for a cost of 980 JPY per account: it is one of the services provided as a part of our Business Port, and it can be rolled out with other applications from development partners."
“KDDI’s expertise in network service, maintenance, and billing account,” Onuki continued, “Microsoft’s technologies and appealing applications from our development partners. By combining our areas of expertise, we believe that it leads to our mutual success. KDDI and Microsoft offer support programs to development partners, reducing the risk for partners who plan to enter the market and building a framework to expand sales opportunities.”
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In the last session, Eisaburo Tamaki (President, Representative Director, ecash corporation), one of the first to have entered into the SaaS business, discussed SaaS from the viewpoint of a software vendor.
“It tends to be the case that the providers suggest SaaS,” said Tamaki, “while the users are interested in the way they can use software easily with less cost. It is important to determine the users’ needs carefully.”
While listing the essential technical elements – multi-tenant, network service and Web API, Tamaki suggested that the true element is the general versatility and cost reduction and that the providers should focus on the technologies that allow them to provide services to more customers at a lower cost.
Engineers Counting on SaaS Exchanged Opinions
After the session, a banquet for the participants was held. The participants exchanged opinions with the wipse governing board, Microsoft staff and the lecturers on SaaS business and technologies.
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